Escrow & TitleIntermediateCalifornia Exam

What is 'title search' in a real estate transaction?

AA physical inspection of the property boundaries, as typically handled by an escrow officer

BThe examination of public records to trace the history of ownership and identify any liens, encumbrances, or defects affecting the titleCorrect

CA search for the property owner's contact information, consistent with standard title insurance practice

DA database search for similar properties that have recently sold, per customary closing procedure in California

Why The examination of public records to trace the history of ownership and identify any liens, encumbrances, or defects affecting the title Is Correct

Answer B: The examination of public records to trace the history of ownership and identify any liens, encumbrances, or defects affecting the title

A title search is the examination of public records (deeds, mortgages, court judgments, tax records, etc.) to establish the chain of title and identify any matters that may affect the title.

Exam Tip: Escrow & Title

Escrow questions test the neutral third-party role and the sequence of closing events. Remember that the escrow agent acts as a dual agent for both buyer and seller and cannot advocate for either side.

Key Escrow & Title Terms in This Question

Deed

A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).

Encumbrance

Any claim, lien, charge, or liability attached to real property that affects its value or limits its use.

Lien

A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.

Title Insurance

Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.

People Also Study

Key Terms to Know

Chain of Title

The sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.